Miller CEO: Beer at a crossroads

WilliamSpain

LAS VEGAS (MarketWatch) -- In another public acknowledgement of domestic beer's woes, the chief executive of Miller Brewing told a crowd of bar owners Monday that the industry is at a "critical crossroads," as it faces flat growth and surging competition from other alcoholic beverages.

After decades of innovative marketing that brought beer's share of the market to about 61% in the mid 1990s, brewers fell into a pattern of "sameness in message, sameness in look and sameness in our products," Norman Adami told attendees at the annual Nightclub & Bar Show here.

Companies like Miller, a unit of SABMiller (SAB), and archrival Anheuser-Busch
BUD, -0.75%
were once among the country's "ideal marketers, right up there with the Nikes and the Apples," he added.

But as consumers began to look for more personalization and sophistication, Adami noted, the business failed to catch on quickly enough. Brewers stuck to the formulas that had worked before: mass-advertising campaigns with lots of bikinis and bad jokes.

"We were promoting sameness and increasingly going lowbrow. It is as if we were promoting beer as the official beverage of the knuckleheads," the executive said. Yet the consumer "was looking for more diversity and style."

As a result, the growth of wine and spirits is "significantly outpacing the growth of beer," Adami asserted, with the exception of imports and microbrews, which continue to grow at a good clip.

To fight back, Miller is overhauling the packaging and marketing of its big domestic brands, including Lite, Genuine Draft and High Life, while heavily promoting imports including Pilsner Urquell and Peroni.

After some very tough years, "Miller has basically been able to stabilize its portfolio and we feel we have established a platform for sustainable growth," Adami told MarketWatch after his speech.

He added that he sees some signs of "a reawakening in the American beer business. I believe the industry is going to get its marketing mojo back."

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